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Ami pro - ec410sg1.pdf
A. Show the median voter's preferred public service level.
Political Economy of Public Policy
B. Demonstrate that it will "beat" all other service levels in a referendum.
C. Show that even if the service is a normal good, differences in the tax price
may cause high income voters to prefer lower service levels than low income
D. Repeat A&B assuming that the voters differ in their assessment of the
marginal benefits of the service rather than marginal tax costs.
5. Develop a median voter model of Environmental protection.
A. In what sense does the median voter "pay" for environmental quality?
B. Why might the median voter be interested in paying for a environmental
C. Use a diagram to depict the median voter's ideal program of environmental
protection. (Label all important details, and explain briefly the nature of all of
A. Find the net benefit maximizing quantity
D. How would an increase in voter income affect his or her demand for
B. Find the area(s) that characterize the individual's net benefit at that level
C. Derive a demand curve for the product or service
6. Use a median voter model to analyze social security programs--e.g.
A. Characterize the optimal benefit level for the median voter.
B. Why does she not give more to the retired persons than this amount?
C. How would an increase in the median voter's age affect the size of program
D. How would an increase in the number of retired persons affect the median
E. In what sense, if any, can the median voter be said to adopt overly generous
7. Develop a median voter model of transfers to the poor.
A. Why might the median voter be willing to pay for a welfare program?
B. Use a diagram to depict the median voter's ideal welfare program. (Label all
important details, and explain briefly the nature of all of the curves used in
C. How would an increase in "welfare fraud" affect the median voter's demand
D. How does the median voter's own income affect his or her demand?E. Why might the median member of a labor union support welfare programs?
4. Analyze a median voter model of government provision of a public
F. In what cases, might such programs be said to be "overly generous?" (Hint,
service. Assume that three individuals have similar tastes (MBs) for the
apply the Paretian and/or social net benefit maximizing norms.)
government service in question but face different tax prices (MCs).
8. Use marginal cost and marginal benefit curves to show the extent of
12. To the extent that policy outcomes reflect an institutionally induced
information that an individual would "rationally" acquire.
equilibrium of self-interested politically active individuals, policy reform
A. Use marginal cost and benefit curves to show the effects of "biased"
assessments of a program's benefits or costs.
A. Analyze geometrically the stabilizing effect of voting on issues one at a time.
B. Discuss some possible implications of rational ignorance for democratic
Show that a spatial voting model implies an equilibrium in this case even
in two-dimensional policy spaces. Does the order in which issues are
C. Would the problem of rational ignorance be greater in political "markets"
voted on matter affect the policy decision?
B. Now assume that one of the voters (perhaps the leader of the House) can
D. Use MB and MC curves to show how "transparency" can affect incentives to
control the order in which policies are voted on.
gather information and also political outcomes.
Show the best outcome that he can achieve for him or herself after a
E. Do political campaigns increase or decrease rational ignorance? Why?
series of 3 votes, beginning with a status quo in the Pareto set.
Does the distribution of voter preference matter for this result? Can an
agenda setter avoid the median voter outcome in a two dimensional issue
A. Use a three person three possibility matrix to demonstrate the majority rule
space? (Assume that voter preferences lie along a straight line.)
B. Use a three person 2-dimensional issue space to demonstrate that voting
C. Are there any reasons to believe that current policies are not the results of
cycles are very likely as soon as a second issue dimension is added.
spatial political equilibria? Why or why not?
C. Identify all the Pareto optimal outcomes in "B", and demonstrate that it is
13. Under proportional representation (PR), the legislature is composed of
possible to get majority approval for moves out of the Pareto set.
candidates selected from party lists in proportion to the number of
D. Discuss how institutional arrangements can reduce the likelihood of such
votes received by the political parties.
A. How does the median PR legislator's preference differ (if it does) from that of
E. Show a three person configuration of ideal points that is cycle free in a
B. How does the number of political parties represented in parliament differ
10. Agency problems exist whenever an "agent" has interests that differ
from that of a plurality (first past the post) system like that of the United
systematically from those of its "principal."
A. Under what circumstances might an elected representative have interests that
C. How does the effect of party discipline differ in plurality and PR systems?
(Illustrate these differences with a diagram.)
B. How does electoral competition reduce agency problems?
14. Suppose that instead of an elected median voter government, an
C. How does rational ignorance increase agency problems?
individual is randomly picked from the population as a whole and
D. Are their also agency problems within government?
11. Institutional reform is one possible way of reducing the problems of
A. Discuss reasons why a revenue maximizing dictator might provide public
voter cycles, voter ignorance, and principal agent problems.
B. Assume that the public service increases the size of the tax base at a
A. Suggest several institutional arrangements which affect voting outcomes.
decreasing rate (MB), and expenditures on the public service reduce the
B. Discuss alternative methods by which such institutional alternatives might be
dictators possibilities for private consumption (MC). Use a diagram to show
the Dictator's preferred service level.
C. In what ways, if any, are the politics of institutional reform different from that
C. Discuss changes in a Dictator's circumstances that might cause him to
D. How would the policies of a randomly chosen dictator with one year terms
differ from a dictator appointed for life? Explain your reasoning.
15. Almost all government policies are implemented by unelected
employees of national, regional, and local governments.
A. Use marginal cost and marginal benefit curves to characterize bureaucrat's
decision to implement a particular policy in a case without agency problemsand with agency problems.
B. Explain how "agency incentives" and selection processes will affect the
magnitude of agency problems within a bureaucracy.
C. Niskanen developed a particular form of agency problem. Use marginal
benefit and marginal cost curves to depict the "all or nothing" budget of abudget maximizing bureaucrat.
D. Explain how conditional budgets can be used to solve (some) agency
problems, and discuss the limits of this method of management.
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